Barquish

Puts Instead of Shorts? Today's Activity

J-unit Steve Liesman reported that Market Makers are now able to short any stocks they write Puts for.

Puts Instead of Shorts? Today's Activity

The outright ban on shorting was a knee jerk reaction and one that will in fact be seen to have been wrong (not completely) and certainly not fully thought through.

Thankfully some semblance of reality has arien to allow Market Makers to short stocks where they write Puts. Now to scream and say this should be banned also is 100% wrong, because those long a stock in these volatile markets need a mechanism to insure against any downward pressure on their portfolio.

That said this may see an increase to allow shorting by the backdoor. I have been long many financial stocks and have been grateful many times for the ability pt buy and sell puts depending on how I manage my portfolio.

So while I welcome some stability I do think that by allowing market makers to short it will reduce some volatility and also allow some orderly way to arrive back to being able to short stocks. If not then there would be such a massive pent up demand for shorting a stock when the ban was lifted.